The good as old company manufactures antique looking oak rocking chairs. Budgeted sales for the first five months of the year are as follows: Budget sales units January. 200 February. 240 March. 180 April. 160 May. 240

Easch rocking chair requires 10 Square feet of oak, at a cost of $20 per square feet. The company wants to maintain an inventory of chair equal to 25 percent of the following month's sales. At the beginning of the year, 40 chairs are on hand. Assume the company maintain an inventory of oak equal to 10 percent of the next month's needs. At the beginning of the year, 240 Square feet of oak are on hand. Inventory of oak at March 31 is estimated to be 180 square feet.

Required: 1) Prepare a production budget, in units for each of the first four months of the year.

2) prepare a purchases budget, in dollars., for each of the first three months of the year.